Directions on Registration and Recording of Equity Fund and Equity Fund Management Company (Enterprise)
Article 1 This Direction is made for the purpose to promote the development of equity fund and equity fund management company (enterprise) and the standardization of registration, establishment, trade and supervision of equity fund and equity fund management company (enterprise) as well as to protect legal rights of investors in Tianjin, according to Companies Act, the Partnership Enterprise Law and Regulations on the Administration of Company Registration, Regulations on Administration of Partnership Enterprise Registration and Instructions of National Development and Reform Commission on Policies for Trial of Equity Fund in Binhai District in Tianjin (FGBCJ[2008] No.1006) .
Article 2 The equity fund mentioned herein refers to fund non-publicly offered and used specifically for direct equity investment portfolio to companies. The fund shall be managed by the fund manager and entrusted by the fund trustee. The investor shall enjoy profits from share percentage and take the risk herewith.
The equity fund management company (enterprise) mentioned herein refers to the company (enterprise) undertakes equity fund trust and operates the equity fund in principals.
Article 3 Equity fund is applicable in types of corporate, partnership, contract and trust. Equity fund management companies (enterprises) shall be of corporate type or partnership.
The Directions are applicable to equity fund and its management established in Tianjin and registered in Tianjin Municipal Administration for Industry and Commerce with a total fund offered not exceeding RMB 5 billion. The Directions is not applicable to the equity fund and its management approved and established by the State Council or National Development and Reform Commission (hereinafter referred to as NDRC).
Tianjin Equity Fund Development and Records Management Office (hereinafter referred as DRMO) is in charge of the development, recording and supervision of the equity fund and equity fund management company (enterprise). DRMO is organized by Tianjin Municipal Development and Reform Commission and related departments under instructions of the National Development and Reform Commission. DRMO supports the equity fund and equity fund management company (enterprise) registered in Tianjin to keep records in the National Development and Reform Commission.
Chapter II Registration of Equity Fund and Equity Fund Management Company (Enterprise)
Article 4 Industrial and commercial registration is required for newly established corporate or partnership equity fund and equity fund management company (enterprise) according to Companies Act of PRC and the Partnership Enterprise Law.
Tianjin Municipal Administration for Industry and Commerce is the authority for registration of equity fund and equity fund management company (enterprise).
Article 5 The number of investors for newly funded equity fund company (enterprise), equity fund management company (enterprise) by shareholding shall not exceed 200 including legal person and natural person. The number of investors for those established by limited liability shall not exceed 50 including legal person and natural person. The number of partners shall not exceed 50 including legal person and natural person if established in partnership. The number of investors for equity fund of other types shall follow the specification of related laws and regulations.
Article 6 Equity fund company in corporate type shall have at least RMB10 million registered capital. The lowest registered capital shall be no less than RMB 5 million for equity fund management company by shareholding. The registered capital for equity fund management company by limited liability shall be no less than RMB1 million. It is allowed to pay the registered capital in installments, in conditions that the first payment of equity fund shall be no less than RMB10 million, and 1 million for equity fund management company.
Partnership equity fund and equity fund management company shall be invested according to the Partnership Enterprise Law of PRC.
Equity fund established in other ways shall follow the related laws and regulations.
All investors of equity fund or equity fund management company (enterprise) shall submit the investment in currency.
Article 7 The business scope of equity fund is defined to be investment to unlisted companies or non-publicly traded stocks of listed companies and related consulting services.
The business scope of equity fund management company (enterprise) is defined to be entrusted management of equity fund, management of investment and financing and related consulting services.
Article 8 The name of equity fund company shall be XX Equity Fund Shareholding, Ltd. or XX Equity Fund Co., Ltd.
The name of partnership equity fund shall be XX Equity Fund Partnership + (Limited Partnership), (Partnership).
The name of corporate equity fund management company shall be XX Equity Fund Management Co., Ltd
The name of equity fund management partnership shall be XX Equity Fund Management Partnership + (Limited Partnership), (Partnership)
Article 9 Corporate and partnership equity funds and equity fund management companies (enterprise) shall state clearly in their article of association or partnership agreement that they would not raise or distribute any fund publicly.
Chapter III Development Records Management and Investment Management of Equity Fund and Equity Fund Management Company (Enterprise)
Article 10 Qualified equity fund and equity fund management company (enterprise) shall record the business licenses after registration in Development and Records Management department according to Instructions of National Development and Reform Commission on Policies for Trial of Equity Fund in Binhai District in Tianjin (FGBCJ[2008] No.1006) .
Article 11 The following requirements shall be met to keep record in Development and Records Management department.
(1) Registration has been made in Administration for Industry and Commerce
(2) The key investors of equity fund and equity fund management companies (enterprise) have been making profits for 2 successive years without big penalties by any administration or juridical authority.
(3) The registered capital of corporate equity fund company (partnership equity fund company, contract or trust fund) shall be no less than RMB100 million with a paid-up capital of no less than RMB20 million. The paid-up capital of corporate equity fund management company shareholding limited shall be no less than RMB10 million. The paid-up capital of corporate equity fund management company (partnership equity fund management company) shall be no less than RMB 1 million.
The investment of individual investor shall be no less than RMB1 million.
(4) There shall be at least 3 senior managers with more than 2-year experience in equity investment in charge of the management of equity fund management company (enterprise). Among them, there shall be at least 1 senior manager with more than 5 years experience in operation and management of equity investment.
Senior managers refer to persons as vice manager or higher rank.
(5) The field of investment shall follow the state laws and regulations on industrial investments.
(6) There shall be qualified fund managers and fund custodians to take charge of fund management and trust respectively. Fund managers and custodians shall have definite and feasible plans.
(7) Other criteria by the development and records management department.
Article 12 The following documents shall be submitted to the development and record management department:
(1) Record application report
(2) Officially sealed copy of registration documents and business license of equity fund and equity fund management companies (enterprise).
(3) Legal documents to regulate the organization and operation of fund and fund management company (enterprise) including agreement between the fund initiators (fund agreement, partnership agreement), agreement for the fund management company (partnership agreement), articles of association, management agreement, trusteeship agreement.
(4) List of investors with investment specified and certificate for paid-up capitals
(5) List and resume of senior managers of equity fund and equity fund management companies (enterprises)
(6) The financial statement for recent 2 years of the key investors of the equity fund and equity fund management companies (enterprises) audited by accounting firm.
(7) Legal opinions by law firm
(8) Record application form, general information form, introduction form of senior managers in three-fold. Soft copy will be submitted after being checked and approved.
(9) Fund management plan and fund trustee plan
(10) Other documents required by the development and record management department
Article 13 The development and record management department shall check the application documents and decide whether to accept the application within 5 working days after receiving the application for recording. If the application enters approval process, the department shall examine whether the requirements are satisfied and give a written notice for either “accepted” or “denied”. Reasons shall be given in the notice for those denied.
Article 14 I the equity fund and its management with record kept in the development and record management department and satisfy the following requirements, the development and record management department will support them to apply for recorded in the National Development and Reform Commission.
(1) Both equity fund and its management shall be registered in Binhai District, Tianjin
(2) At least 1/3 share of fund shall be committed subscription by financial organ.
(3) Other requirements by the National Development and Reform Commission
Article 15 The equity funds and equity fund management companies (enterprise) recorded in the development and record management department shall submit annual financial report and return audited by certified accountants as well as the big operational events within 4 months after end of each fiscal year.
The big event refers to:
(1) Modification of legal documents such as articles of association or agreements.
(2) Change of capital
Change of senior managers or fund managers, custodians
(4) Important investment
(5) Liquidation and winding-up
Article 16 The development and record management department shall review the financial statement, operation report and trust report submitted by recorded equity fund, equity fund management companies (enterprises) and trust bank after end of each fiscal year. If necessary, irregular review is applicable.
For those violating to the Directions and not rectified within 30 working days after the notice by the development and record management department, the record will be canceled.
Article 17 Equity fund management company (enterprise) shall prudently design construction frame of organization, internal control system, risk management program and financial control system.
Article 18 For the benefit of the investor and the safety of fund, the equity fund shall entrust its fund to commercial banks certificated by Banking Regulatory Commission.
Capital not invested to company shall be deposited in banks or used for purchasing fixed-income securities such as national debt.
Article 19 China Equity Fund Association will supervise the behaviors of self-regulating equity funds and equity fund management companies (enterprises) according to the Directions and related laws, regulations and rules in order to protect the profit of the industry.
Chapter IV Supplementary Articles
Article 20 These Directions will be interpreted by Tianjin Development and Reform Commission and related departments.
Article 21 The development and record management department shall analyze the development of equity fund and equity fund management companies (enterprises) in time and modify the Directions as per new issues.
Article 22 The Directions will come into effect from the day of issuance
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